EBITDA multiples by industry

Private companies are priced as a multiple of earnings. For an established business that means a multiple of EBITDA — earnings before interest, taxes, depreciation and amortization — and the first question every owner asks is which multiple applies to them.

The table below is the answer we work from. These are the benchmark ranges behind our business valuation calculator, published here in full so you can see what the tool is actually doing. But the ranges are the least interesting part of this page. Two companies in the same industry at the same size routinely trade almost 2x apart on multiple alone, and the second half of this page is about why.

The ranges

Calibrated to a control sale of a US business with $3–5M of adjusted EBITDA. Sorted high to low.

Industry	EBITDA multiple	Midpoint
Software & Technology	6.0x – 10.0x	8.0x
IT Services & Managed Services	5.5x – 8.5x	7.0x
Healthcare Services	5.0x – 8.5x	6.8x
Financial Services & Insurance	5.0x – 8.0x	6.5x
Government & Defense Contracting	4.5x – 7.5x	6.0x
Education & Training	4.5x – 7.0x	5.8x
Home & Facility Services (HVAC, plumbing, etc.)	4.5x – 7.0x	5.8x
Home Care & Senior Services	4.5x – 7.0x	5.8x
Manufacturing	4.5x – 7.0x	5.8x
Aviation Services	4.5x – 6.5x	5.5x
Distribution & Logistics	4.5x – 6.5x	5.5x
Advertising & Marketing Services	4.0x – 6.5x	5.2x
Architecture & Engineering	4.0x – 6.5x	5.2x
Professional Services	4.0x – 6.5x	5.2x
Apparel & Consumer Products	4.0x – 6.0x	5.0x
Staffing & HR Services	4.0x – 6.0x	5.0x
Construction & Specialty Trades	3.5x – 5.5x	4.5x
Transportation	3.5x – 5.5x	4.5x
Restaurants & Hospitality	3.0x – 5.0x	4.0x

What these numbers are, and what they are not

Being precise about provenance matters more here than anywhere else on this site, because most published multiple tables are vague about exactly this.

• They are our own working benchmarks, informed by published market data and by what we see buyers paying. They are not a reproduction of anyone's subscription dataset. The comprehensive by-industry databases — GF Data's valuation database, DealStats, the full IBBA Market Pulse — are paid products, and a table claiming to reproduce them for free should be treated with suspicion.
• They describe broad sectors, not SIC codes. A specialty machining shop with proprietary tooling and a commodity stamper are both "Manufacturing" and do not trade alike. The range is a starting point; the sub-sector can move you a full turn either way.
• They assume a control sale to a financially capable buyer in a competitive process. A minority stake, a distressed sale, or a single unsolicited approach are all different exercises.
• A range is not an appraisal. Nothing here substitutes for a valuation of your actual company by someone who has read your financials.

Where the whole market sits

For a market-wide anchor, the most credible public reading comes from GF Data, which collects completed transactions from private equity contributors. For the first quarter of 2026, GF Data reported 80 completed transactions at an average of 7.3x trailing-twelve-month adjusted EBITDA, across a coverage range of $1M to $500M in enterprise value (reported by ACG, May 19, 2026).

Read that number carefully. It is an average of private-equity-sponsored deals, which skew toward larger and better-performing companies than the market as a whole. It is the right anchor for what a well-run company in a competitive process achieves — not for what the median business sells for.

Size moves your multiple more than your industry does

This is the single most under-appreciated fact in private company valuation. The same business, at different scale, is a different asset: bigger companies have more management depth, more buyer competition, and access to cheaper acquisition debt, and all three show up in the price.

Relative to the $3–5M baseline the table above uses:

Adjusted EBITDA	Effect on the range
$10M and above	About 25% above baseline
$5M – $10M	About 12% above baseline
$3M – $5M	Baseline
$1M – $3M	About 15% below baseline
$500K – $1M	About 28% below baseline
Under $500K	About 40% below baseline

Work it through on a manufacturer, benchmark range 4.5x – 7.0x:

• At $2M of adjusted EBITDA, the range compresses to roughly 3.8x – 6.0x — a value of about $7.7M to $11.9M.
• At $6M, it expands to roughly 5.0x – 7.8x — a value of about $30.2M to $47.0M.

Three times the earnings produces just under four times the enterprise value. That gap is the entire argument for fixing the things below before you go to market, rather than after.

The four things that move you inside your band

Industry sets the band. These decide where in it you land, and they compound — each one multiplies the last rather than adding to it.

Factor	Helps	Hurts
Recurring revenue	Over 50% of revenue recurring or repeat: about +10%	Little recurring revenue: no premium at all
Growth	15%+ and sustained: about +10%	Declining revenue: about −15%
Customer concentration	No customer over 10%: about +3%	A customer over 25%: about −12%
Owner dependence	Runs without you day to day: about +6%	Depends on you daily: about −10%

Notice the asymmetry: buyers punish decline harder than they reward growth, and a concentrated customer costs you more than a diversified base earns you. Diligence is a downside-hunting exercise, and the pricing reflects it.

Stack all four in your favour against all four against you, and the multiple differs by a factor of roughly 1.96. Same industry, same earnings, nearly double the price. Recurring revenue and owner independence are the two most owners can still change with two or three years of runway.

The denominator matters as much as the multiple

Every conversation about multiples is really a conversation about two numbers, and owners spend nearly all their attention on the wrong one. Your price is the multiple times adjusted EBITDA — reported profit plus legitimate normalizing add-backs: owner compensation above market rate, genuinely one-time expenses, personal costs running through the business.

A defensible add-back is worth its full multiple. $200,000 of excess owner compensation, at 6x, is $1.2M of enterprise value. An add-back you cannot document is worth nothing, and it costs you credibility on every other number in the model at the exact moment you can least afford to lose it.

On that point there is a useful piece of public evidence, with a caveat most people quoting it leave out. Across 360 transactions completed since the third quarter of 2024, GF Data found sellers who commissioned a sell-side quality of earnings review averaged 7.4x against 7.0x for those who did not. The caveat: that benefit was concentrated in deals above $50M of enterprise value, and smaller deals tended not to see a valuation boost at all (Middle Market Growth, December 2, 2025). A company at $3–5M of EBITDA is often below that threshold. A QoE may still be worth commissioning for the diligence speed and the credibility it buys — but the multiple expansion is not something you should count on at that size.

Why the extremes sit where they do

Software and IT services at the top (6.0x – 10.0x, 5.5x – 8.5x). Contracted revenue that renews without a salesperson is the closest thing in private markets to an annuity, and buyers underwrite it as one. Gross margins survive a downturn better than anything in the table.

Healthcare services at 5.0x – 8.5x — the widest band on the list, and the width is the point. A practice with diversified payers and transferable referral relationships prices near the top; one built on a single physician's referrals or a single payer contract prices near the bottom. Both are "healthcare services." Both are "healthcare services", and the gap between them is worth close to half the value of the business — the full breakdown is in healthcare services valuation multiples.

Government and defense contracting at 4.5x – 7.5x, where the multiple depends almost entirely on contract vehicles, backlog and recompete history rather than on margins. Government contractors also have a wrinkle no other sector shares: SBA size recertification means the identity of the buyer can change what the revenue is worth after closing. Government contractor valuation multiples works through that and the FAR cost principles behind it.

Restaurants and hospitality at the bottom (3.0x – 5.0x). Ongoing capital expenditure per location, long lease obligations that transfer with the business, and concept risk that is genuinely hard to diligence. This is also the band where the sub-sector caveat bites hardest: a manager-run multi-unit group with clean financials is a different asset from an owner-operated restaurant, and published data puts groups like that as high as 7x — above the top of the band here, before the size adjustment is even applied. Restaurant EBITDA multiples works through what separates the two, along with the lease arithmetic that decides more restaurant deals than the multiple does.

Construction and transportation at 3.5x – 5.5x. A project backlog is not recurring revenue, however large it is, and working capital swings make the cash flow harder to lever — which matters, because buyer leverage is what supports a multiple.

The multiple is half of the answer

Everything above decides your headline number. It does not decide what you keep, and those are genuinely different questions. Deal structure — how much is cash at close, how much is rolled equity, how much is an earnout contingent on a plan you no longer control — routinely moves after-tax proceeds more than a full turn of multiple does.

Worth reading next: how private equity firms actually value a company, how a buyout gets financed, and the honest ledger on selling to private equity. If you want the multiple without handing over control of the company, that is what an Independent Buyout is for.

Frequently asked questions

What EBITDA multiple is my business worth?

Start with your industry band above, adjust for size, then adjust for recurring revenue, growth, customer concentration and owner dependence. The valuation calculator runs exactly that sequence and shows you which factors are moving your number in each direction.

Why do multiples differ so much between industries?

Because buyers are pricing the durability of the cash flow, not the cash flow itself. Revenue that recurs without effort, margins that hold up in a downturn, and a business that runs without its founder all reduce the risk a buyer is underwriting — and a lower risk is exactly what a higher multiple is.

Is a higher multiple always better?

No. A 7x offer that is half earnout can leave you with less than a 6x offer paid in cash at close. Compare after-tax proceeds under realistic assumptions, not headline multiples.

What is the difference between EBITDA and adjusted EBITDA?

EBITDA is reported profit before interest, taxes, depreciation and amortization. Adjusted EBITDA adds back items that will not exist for the next owner — above-market owner pay, genuinely non-recurring expenses, personal costs in the business. Buyers price adjusted EBITDA, and they will challenge every add-back you cannot document.

Do these multiples apply to a business under $1M of EBITDA?

Not really. Below roughly $1M the buyer pool shifts from institutional acquirers to individual buyers and small strategics, pricing often moves to a multiple of seller's discretionary earnings rather than EBITDA, and the dynamics are different enough that the size adjustment above only approximates it.